The M&A Pre-Nup

There are few things more meaningful than the beginning of a new relationship.

That warm sense of possibility when two parties are getting to know one another, each bringing forward their best qualities, optimism and enthusiasm. In those early stages, the future feels bright, the opportunities seem endless, and it’s almost impossible to imagine that things could ever be any different.

Yet, as we know - both personally and professionally - relationships evolve. In Australia, with our high divorce rate, we are reminded that even the most promising, love filled unions can shift over time. People grow apart, and differences that once felt minor can become major fault lines. It may sound a touch sombre (and perhaps a little off topic), but there are lessons here that apply directly to business partnerships, particularly during mergers and acquisitions.

Over the past 12 months, the topic we have been asked to consult on most often is M&A activity. In a period defined by unprecedented growth opportunities in financial advice, the consolidation wave continues to build. Achieving scale is powerful, and the joining of two, or sometimes many more established advice businesses can be an attractive, logical and a commercial sound path to growth.

When we think about M&A, due diligence typically centres around the tangible components: thorough file audits, analysis of client segmentation, assessment of operational processes and structure, pricing models, growth potential, and of course, negotiation of commercial terms. Yet the reality is that the most commonly overlooked element is also the most critical one: the people.

Time and again, it is cultural misalignment, not numbers, systems nor processes that derails a merger. Those early “warm and fuzzy” stages can disappear quickly when values clash, when egos emerge, when legacy meets resistance, and when control becomes a point of tension. Without a foundation of open and transparent communication, even the most commercially promising union can turn unpleasant fast.

So, what practical steps can we take early on to mitigate these risks and avoid the equivalent of a messy business divorce?

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1. Have the culture conversation upfront

Seek a deep understanding of the other business’s people and workplace norms: expectations around flexibility, working hours, work from home arrangements, social rhythms, incentive structures, leave policies, and what a genuine “week in the life” looks like. Share the realities of your environment as well. Authenticity is essential.

Speak about the relationships the Advisers have with their clients. What does your biggest and most profitable client expect? What about your most challenging one? Then tell each other all about your favourite client and what the relationship, value proposition and expectations on both sides of the relationship (client and Adviser) are present.

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2. Address the uncomfortable early

If something feels misaligned, or if behaviours hint at ego, fear, resistance to change or resentment, you need to face this from the beginning. Naming concerns early, with empathy and curiosity, prevents those issues from becoming larger fractures later.

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3. Clarify structure with absolute precision

During periods of transition, leadership clarity matters. Decision making cannot always be done by committee. Both parties need explicit understanding of reporting lines, roles, responsibilities, and any shifts in authority. For example, being highly valued in the new organisation may not automatically translate to holding management responsibility. Clarity now prevents conflict later.

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4. Define the non negotiables

Both sides should articulate what truly matters - what principles or elements cannot be compromised, and what carries the greatest long term risk. Document these clearly. Avoid getting stuck on the small stuff (like office seating arrangements or rebrand timelines) and stay anchored to the decisions that shape the future.

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5. Document your people-first integration plan

If the above has been considered and the merger is going ahead, the integration phase, the first early months living together, is vital to the success of the merger. Make sure you have put thought into how it will work practically and identify and communicate some people-first ways to ensure early integration is inclusive, warm, and human-centric.

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Having operated in this industry for more than 30 years, McQueen Group have accumulated significant experience with Mergers and Acquisitions. “Our experience has been consistent – if the individuals around the table can’t communicate honestly, if trust is lacking, if the teams do not interact well during the early stages – these issues rarely resolve themselves post -transaction. More often, they intensify”, Nowaki McQueen-Tokita, CEO of McQueen Group says. “Sustainable mergers are built on shared intent, aligned culture and mutual respect”.

We are operating in an incredibly exciting market with significant opportunity for growth. M&A activity will continue to accelerate into 2026 and beyond. It is easy to be swept up in impressive financials, strategic synergies and the excitement of “what could be.” But it’s always the people who ultimately determine the happiness, stress levels, and long term success of the merged entity.

So, take your time. Get to know the individuals who will become your team. Ask the questions that may feel “soft” in the context of a business deal, but materially influence whether the partnership can thrive.

And importantly, be willing to slow the process, or walk away if genuine concerns arise. Sometimes the wisest move is to keep dating a little longer before making any commitment.

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For more information or a confidential chat on any of the above, please get in touch with Genevieve Frost or your Drummond account manager.